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Here’s what I would’ve wanted:
Energy is rationed. Everyone gets the same amount. You can’t sell it (it’s cap without trade) but you can work together in collectives and coops to pool your allotment. The rations are separate for fossil-derived energy and renewable energy, with an awareness that renewable doesn’t mean infinite since there’s a bandwidth issue. The fossil rations rapidly decrease.
Cap without trade is rationing. The trade part is the iffy part.
The iffiest part of cap and trade is the grandfather-based allotment, which rewarded emissions.
Even without that allotment, trading or even auctioning is problematic since it means that the rich can buy their way out of responsibility. Last time I wrote about this I didn’t give that aspect of it due weight.
I prefer a cap where the permits aren’t transferable, as outlined in the top section.
A carbon tax has the problem that it’d need to be infinitely high sooner rather than later in order to be commensurate. We want to move towards zero fossils.
A dividend that rewards society for emitters emitting isn’t great either. That seems like a pretty wack incentive to put into place.
Either is better than nothing (except for the grandfather allotment which has done more harm than good).
Proceeds from a tax or from auctioning off permits needs to go to environmental & climate reparative, mitigating, or adaptive work on a larger scale, not towards luxuries (or even necessities) for the peeps.